EUROPE: Norway, Europe’s biggest gas supplier after replacing Russia, expects record exports this year. What is the price forecast
Share
Norwegian pipeline gas exports to Europe could approach their highest level since 2017 by the end of this year, having already risen 10% so far to 2024, the head of the system operator said, Gassco, for Reuters.
“This year, so far, we’re kind of back to the levels we were at in 2022,” when exports were close to an all-time high, Gassco CEO Frode Leversund told Reuters in an interview on the sidelines of an energy conference. Exports recorded a decrease in 2023.
After Moscow invaded Ukraine in 2022 and cut off Russian gas supplies, Norway became Europe’s largest gas supplier.
At the end of July, Norwegian pipeline gas volumes totaled 70.2 billion cubic meters (bcm), compared with 64 billion cubic meters for the same period last year, Leversund said in a statement with the first information from Gassco regarding volumes delivered this year.
The increase was due to strong demand from European customers, high system availability, easier maintenance and upgrades at the Kollsnes processing plant, the CEO added.
In 2023, Gassco delivered 109.1 billion cubic meters (bcm) of gas through its 8,800km pipeline network to Belgium, the UK, France, Germany and Denmark, down 6.7% from 116.9 billion cubic meters a year earlier.
A 10% increase over the full year 2024 could lead to deliveries that could exceed the record 117.4 billion cubic meters reached in 2017.
“I won’t say there will be an export record, but we will see numbers around the highest shipments we’ve had, based on current assumptions,” Leversund said.
About 95% of Norway’s gas exports go through pipelines, while another 5% comes from liquefied natural gas outside the Gassco system.
The Norwegian gas system enters its peak maintenance season at the end of August, scheduled to ensure it is operating at capacity to meet increased winter demand.
Given Norway’s dominant position as a supplier, any unforeseen problems and delays can quickly push up gas prices.
The safety of the Norwegian system has also come under closer scrutiny since the destruction of the Russian-German Nord Stream submarine gas pipeline in 2022, with Gassco regularly monitoring the Norwegian pipelines.
“This year we did a full inspection of the pipelines,” said Leversund, who declined to explicitly name any particular facility in the Norwegian system. On Monday, security services from seven European countries briefed Norwegian energy executives and officials on what they believed to be Russian threats to critical infrastructure.
Price forecast: between 30 and 40 euros/MWh of gas, in the long term
Norway’s Equinor, which became Europe’s largest gas supplier after Gazprom was dethroned, expects gas prices to remain between 30 and 40 euros per MWh in the long term, according to the company’s executive vice president, Kjetil Whoa.
“We are optimistic about gas prices for many years to come. These are the price levels we expect to see. We are talking about a period of at least until 2035,” he said.
Hove noted that liquefied natural gas (LNG) is now the main price driver in the European gas market, but stressed that pipeline gas from Norway, which competes with LNG, remains very attractive.
The executive vice president also mentioned that Equinor plans to invest 5-6 billion euros annually in Norwegian offshore projects until 2035. The company aims to maintain oil and gas production levels similar to current ones in the next decade.
